Layoffs at IBM Watson Health Spark Concern

June 1, 2018

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IBM is continuing to reposition our team


IBM is laying off some of its Watson Health employees, but it may not be quite the "bloodbath" that online commenters and several other news reports have made it out to be.


"IBM is continuing to reposition our team to align with our focus on the high-value segments of the IT market. We continue to hire aggressively in critical new areas that deliver value for our clients and IBM," Edward Barbini, vice president of corporate communications at IBM, told MD+DI.


However, Barbini declined to answer questions related to the specific number of layoffs in Watson Health, or the significant percentages that have been reported by multiple news outlets over the past several days.


"We're not discussing specific numbers. It's a small percentage of our global Watson Health workforce, as we move to more technology-intensive offerings, simplified processes, and automation to drive speed."


Online commenters on and Watching IBM, along with multiple news reports citing unnamed sources from within the organization painted a different picture of the situation.


One Dallas-based commenter on said that "we all knew it was coming but nobody expected it to be this fast and rampant," while another commenter estimated that 80% of that same Dallas-based office was let go.



Growth via M&A


IBM Watson Health has grown dramatically over the past couple of years through acquisitions and partnerships.


In 2016 IBM doubled the size of its Watson Health business through the $2.6 billion acquisition of Truven Health Analytics. Truven offers healthcare data services targeted at employers, hospitals, and drug companies, and makes software that can parse through millions of patient records. Truven's main offices are in Ann Arbor, MI, Chicago, and Denver. At the time of the acquisition, Truven had around 2,500 employees.


The Truven deal followed other major healthcare acquisitions in the company, including Cleveland-based Explorys, Dallas-based Phytel, and Chicago-based Merge Healthcare. The company paid about $1 billion for Merge.


Many of the online commenters reporting layoffs noted that the Cleveland and Dallas offices, which are largely made up of employees who came to IBM through the Explorys and Phytel acquisitions, were heavily impacted by the cuts. Several comments also estimated that a third of the company's Cambridge, MA-based Truven Provider Client Experience team was laid off, although it is unclear how large that specific team was before the layoffs.


"It was a carnage today," said one commenter on a thread related to the Cambridge-based layoffs. "We were expecting cuts, but this was wide and deep."


Watson is deployed in more than 155 hospitals and healthcare organizations worldwide


During IBM's investor briefing in March, CFO Jim Kavanaugh highlighted Watson Health's success. He said Watson is deployed in more than 155 hospitals and healthcare organizations and is trained on 13 cancers compared to just four cancers about a year ago. Company-wide, Kavanaugh noted that about 50% of IBM's employees have joined the company just in the past five years.



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